OPTIMAL INVESTMENT SCENARIOS FOR THE POWER GENERATION MIX DEVELOPMENT OF IRAQ

ABSTRACT

This study is about finding an optimal investment scenario for developing Iraqs electricity generation mix. This study uses the Markowitz portfolio method to optimize Iraqs electricity generation mix. The study model takes into account the costs associated with each technology used to generate power and the risks of using that technology. The scope of the study focuses on technologies involved in the electricity mix, which are gas turbines, thermal, diesel, and hydro power in addition to the electricity generated through independent power producers (IPPs) and imported electricity. An optimal investment scenario where the costs and risks are balanced is proposed. This scenario can reduce the current costs of electricity production by 39 percent as well as maintaining the risk at its current value. The contributing shares of technologies involved in the scenario include using 47 percent gas turbine, 28 percent IPPs and imported electricity, 19 percent thermal, 4 percent diesel, and 2 percent hydro power.